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Chris Fleming
VP Life Strategic Planning and Business Development
Head of USFS Six Sigma
ING US Financial Services
Embedding Lean Six Sigma and Linking Deployment to Business Strategy
May 11, 2006
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• European company based in the Netherlands• Provider of banking, insurance and asset management
services
• Operating in over 50 countries
• 114,000 employees
• Strong and positively trending financial results• As of 4/4/2006, ING has the 13th largest market cap among
global financial institutions (source: Bloomberg)
• Enormous effort has improved brand awareness
• US companies built through acquisitions… acquirer of acquirers• Insurance Americas contributes 22% of ING’s profits
ING
3
• Strong Financial Results, pressure to grow
• Organization tired of new methodologies…
• Recent history of restructuring, moves, etc.
• Company focused on two major initiatives• Your Future. Made Easier
• Economic Value
Background
Why does ING need Lean Six Sigma?
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ING Brand
5
ING Brand
• Focus on customer success
• Being easy to do business with
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Managing For Value
• Creating sustainable economic value• Drive profitable growth
• Increase return on book
• Reduced cost of capital
7
Critical Elements of a Successful Deployment
• Leadership Commitment
• Dedicated Resources
• Alignment and Integration with Business Strategy
• Incentives and Accountability
• Quantifiable Measures and Goals
• Business Process Framework
• Customer Focus
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Building Support
• Retail Life business hired a new leader• Open to Six Sigma methodology, had
seen the results before…former skeptic converted
• Recognized a need for change
Finding a Business Champion
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Building Support
Stating the Need…Getting Started in the Life Business
• Business was generating strong results; however…
• Falling application counts• Customer complaints/dissatisfaction• Processes and organization not aligned• Lack of metrics, very few customer-
centric metrics• High-cost organization
Business Leader Created the Burning Platform
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Building the Team
• Established a Quality Council to ensure consistency and govern the program• Resource alignment, project selection and
results owned at the business unit• Quality Leaders named for each business
area• Full-time Black Belts and Master Black Belts• Mix of internal and external resources• Aligned by core process where scale
permitted• Established one year staffing target of 1%
full-time six sigma resources
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Building the Team
Quality Leaders• Influential business leaders• Not a full-time role• Champion local deployment• Drive local program alignment with
strategic objectives
Master Black Belt• Hired externally• Full-time position• Certified, experienced from well-respected
programs• Assigned to each business area
Black Belts• Hired primarily internally with a few
experienced Black Belts hired externally• Full-time position• Deployed by business area, assigned to
Master Black Belts
Green Belts• Executive Green Belt training rolled out
to all leadership• Part-time Green Belts• Green Belt training deployed though
Black Belt-led project teams
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Training Model
• Leveraged external resources to deliver off-the-shelf training• Executive Green Belt• Green Belt for Teams• Black Belt
• External resources experienced with program launch phase• Critical consideration as many six sigma people come from
mature programs
• First round of training material enhancements completed (Black Belt)• Incorporating ING business examples• Integrating Lean methodology more closely
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Measures, Goals and Accountability
• Mix of global and area measures and goals
• 1% full-time six sigma resources
• Leadership trained
• Offset cost of program first 12 / 18 months
• Leadership six sigma goals and accountability
• Black Belts benefit targets established by
area($500k - $1MM)
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ING Lean Six Sigma Model
Build customer-centric culture focused on value creation
DMAIC DFSSProcess
Management• Improve existing
processes, products or physical space
• Design new processes and products when none exist or the current environment is not capable
• Build Six Sigma Structure through process documentation, defining customer requirements, and tracking critical process indicators
Lean Process Design
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Linking to Strategy
Your Future Made Easier
Manage for Value Creation
ING Strategic Objectives
Superior Compliance Environment
ING Strategic Objectives
ING Strategic Objectives
Winning Performance Culture
ING Strategic Objectives
DMAIC DFSSProcess
Management• Improve existing
processes, products or physical space
• Design new processes and products when none exist or the current environment is not capable
• Build Six Sigma Structure through process documentation, defining customer requirements, and tracking critical process indicators
Lean Process Design
Execution
Lean Six Sigma Becomes “How” We Execute
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Sustaining the Momentum
• Communication• Brownbag sessions
• Department meetings and overviews
• Internal web site
• Articles
• Sharing the Results• Gallery walks
• Employee meetings
• Management reviews
• Goals and metrics
• Employee Engagement• Leadership
• Process owners
• Employees
• Leadership Driven• Visible
• Goals and metrics
• Strategic Alignment• Project efforts focused on high-
impact areas
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Linking to Strategy
• Business to Unit to Department Strategies Linked
• Consistent, aligned metrics
• Critical Projects Driven by Strategic Objectives, linked with consistent metrics
What We Can Learn from Hoshin Kanri (Policy Deployment)…
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Linking to Strategy
Voice of Customer
Voice of Business
Market Factors
Competition/ Benchmarks
SWOT
USFSStrategic
Objectives
BusinessLine
Strategies
BusinessLine
Tactics
Strategy Deployment
Review Process
METRICS METRICS
PROJECTS
METRICS
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• VOC – timeliness, accuracy, satisfaction
• VOB – Increase sales, reduce expenses, improve productivity, enhance performance review process
• VOE – Increase employee retention, improve employee satisfaction
• Legal or Compliance – reduce day two items, control compliance risks, reduce fines
Sources of Six Sigma Projects
Six Sigma projects may be generated from a number of sources, some examples below…
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Inputs
Voice of the customer
Voice of the business
Voice of the employee
Market and environmental
factors
Knownsolution with
supporting data
?
Translate into project
opportunities
YESNO
Implement solution, follow six s principles
Capable process,
DMAIC project methodology
Not Capable process, DFSS
project methodology
Prioritize Projects
Strategic Fit Economic
Value Time/Effort
Project Selection Process
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Six Sigma Failure Factors
• Leaping to Solution• Not data driven or based on faulty assumptions
• Serving the Wrong Customer• Not based on the voice of the “next” customer
• Selecting the Wrong Projects• Not linked to strategy
• Solution-Caused Problems• Poor sequencing, stakeholder under-involvement, resource
planning, change management or project closure
Adapted from Six Sigma’s Seven Deadly Sins by James P. Zimmerman and Dr. Jamie Weiss of Kepner Tregoe
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Use COPQ as a Source of Projects
• Hidden Factories• Re-work of defects in processes or products• Complex workarounds• Excessive phone calls, emails, faxes and other correspondence
as a result of poor performance
• Inspections and Audits• QA functions in the process• Back-end audits and approvals• Multiple approval steps
• Lost Sales and Market Share• Market product requirements not met• Service or delivery requirements not met
• Fines and Other Penalties
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Case Study: ING’s Life BusinessLeadership Commitment President of the Life business
- Visible supporter of six sigma methodology
- Six sigma positioned as method Life business will use to achieve its business objectives
- Created the burning platform: growth and efficiency
Process Owners
- Build awareness, support deployment
Dedicated Resources Built team of full-time MBBs and BBs
- First hires 6/2005
- Certified MBB hired externally from recognized program
- BBs hired internally from pool of strong candidates
- External certified BBs hired to supplement six sigma expertise and accelerate team knowledge building
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Case Study : ING’s Life BusinessAlignment and Integration with Business Strategy
Incentives and Accountability
Team aligned with core processes
Project selection and prioritization supported business strategic objectives
- Increase front-end service and capacity to support growth model
- Improve product delivery capability
- Create value through efficient in-force management
Six Sigma team goals and metrics aligned with business strategy
- Increase policy count growth by 10x
- Improved profit margins
- Enhance service capabilities and customer satisfaction metrics
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Case Study : ING’s Life Business
Quantifiable Measures and Goals
Incentives and Accountability Leadership incentives put in place to support ownership of program results
Shared program goals across USFS
- Staffing
- Program expense coverage
- Training
Life business unit goals
- Staffing
- Program expense coverage
- Training
- Metrics
Individual six sigma team member goals
- Projects
- Creating the culture
- Training and development
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Case Study : ING’s Life Business
Customer Focus
Business Process
Framework
Black Belts aligned by core process area
- Customer acquisition
- Service the customer
- Manufacture the product
Functional structure versus process alignment
- Business model versus shared service model
Followed business and ING brand strategy
- Your Future. Made Easier
- Project selection
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Case Study : ING’s Life BusinessEarly Project Results Orange Express
Goal: speed and capacity
- Underwriter first-look actions improved from 7% to over 80%
- Cycle time reduced by 50%
- Unit cost reduced by over 60%
Producer Contracting Process
Goal: speed and capacity
- Cycle time reduced by 70%
- Variation reduced by over 80%
Servicing the Customer (multiple projects)
Goal: speed and cost reduction
- Cycle times reduced by 70+%
- Variation reduced by over 80+%
- Cost reduction targets achieved
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Learnings
• Deployment is never finished• Program objectives play a big part in determining the
nature of commitment that is required• Local versus global deployment• Culture change versus project execution
• Do not underestimate program support and communication challenges
• Have additional expertise available to provide coaching and mentoring when internal resources become strained
• Gain early commitment on metrics and goals• Keep senior leadership engaged throughout• Select top influencers to drive deployment• Identify early adopters and leverage